Goldman Sachs-owned financial technology startup Circle announced that they would be releasing a Stablecoin pegged to the value of the US dollar. The coin was designated as the USD coin.
The coin is supported by developments in the CENTRE open source framework. It will function as a “tokenized fiat money”, with Circle stating that the coin is very important for enabling mainstream adoption of the blockchain for payments. The coin also supports maturation in blockchains that include smart contract systems, in terms of the financial contracts such as tokenized securities, loans, and property.
USD Coin allows users to use the USDC fiat tokens for crypto trading and payments, while also providing a full reserve USD-backed Stablecoin. It is built on the open source Stablecoin framework for fiats developed by CENTRE.
USD Coin aims to identify and provide solutions to pre-existing Stablecoin solutions. Circle says that they have lacked transparency, operate in unregulated jurisdictions with unknown banking and audit partners and that they have been built as closed proprietary technologies. USDC aims to solve this problem by providing “detailed financial and operational transparency”.
They also say that they will operate within the regulatory framework of US money transmission laws, which is to be expected from a company owned by the fifth-largest bank in the United States. This is clarified as they say it will be “reinforced by established banking partners and auditors”.
In order to avoid the pitfalls that come with closed proprietary technologies, it will be built on an open source framework with an open membership scheme that eligible financial institutions can participate in.
The coin is built on Ethereum’s ERC20 standard for tokens, and therefore can be used on any exchange that supports the standard and can be used with any ERC-20 compatible digital wallet. Circle also said:
“There is a lot of interest from crypto ecosystem players, consumer fintech companies and banks for becoming issuers of USDC and other fiat tokens in different currency markets around the world.”
The list of supporters and contributors for USDC is numerous, with the main company being Bitmain with a strategic investment of $110 million. Bitmain is a company that mines Bitcoins and designs ASIC chips for mining use.
The company also operates Antpool, one of the world’s largest mining pools. Other investors include Breyer Capital, Pantera, Blockchain Capital, Accel, Tusk Ventures, and IDG Capital.
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